…there’s big difference between RapidShare and the likes of Dropbox. MegaUpload, RapidShare etc is clearly profiting from copyrighted content. They pay users to upload popular files, and in 99% of cases it is pirated content. In turn they profit when users want to access those files. It’s a huge “industry,” and there will most likely be many more arrests when the list of affiliates that directly made money by uploading copyrighted content without permission goes public.

I won’t consider the legal matters here, but the emails cited in the indictment paint a pretty clear picture of intent. They show that:

A) In many cases, Megaupload employees knew that *specific* files on the site were in violation of copyright, but they took no action to remove the content

B) Knowing specific files were copyrighted, megaupload still paid out rewards to those files’ uploaders

C) In a few instances, staff members shared links to copyrighted content with eachother and with the internet at large.

Those are just the most egregious points, which basically demolish their claim of safe-harbor. But there’s more: The claim of conspiracy at first sounds ridiculous and overblown, but it begins to make sense when the indictment describes all the ways Megaupload is alleged to have actively worked to conceal piracy. Claims of DCMA compliance are shot to pieces by an allegation that certain links were the subject of takedown notices, but remained active for over a year.

I had been wondering how MegaUpload was different from, say, YouTube. These seem like important details that I did not see in the general media accounts of the takedown. It looks like the indictment will be interesting reading for those of us who don’t know much about this corner of the Internet.

The government has copied “selected” data from the Megaupload servers, but it has not even revealed to the defendants which evidence has been preserved. Megaupload argues that the government may have “cherry picked” the data that will cast Megaupload in the most negative possible light. The company argues that allowing the rest of the data to be destroyed will make it impossible for Megaupload to unearth evidence that could cast the company in a more favorable light.

If Judge O’Grady is to be believed all this damage could very well have been for nothing because the authorities simply can’t serve foreign companies. This could lead one to wonder whether the whole setup was to simply destroy Mega’s businesses.

A New Zealand court has ruled that the U.S. Government must hand over the evidence they have against Megaupload so Kim Dotcom and other employees can properly defend themselves against the pending extradition request. The U.S. refused to comply but Judge Harvey concluded that this would be unfair. He further noted that the entire U.S. case stands or falls on the strength of the alleged copyright infringement charges.